Advantages Of Leasing
Getting the equipment you need today by leasing-financing instead of outright a cash purchase, can be a cost-effective option, particularly if you don’t have the cash on hand. Along with being able to regulate your cash flow more effectively, leasing offers these additional advantages:
Asset Management
An equipment lease provides the use of equipment for specific periods of time at fixed payments. The lessor assumes and manages the risk of equipment ownership.
Balance Sheet Management
Because an operating lease is not considered a long-term debt or liability, it does not appear as debt on your financial statement, thus making you more attractive to traditional lenders.
Current Technology
If the nature of your industry demands that you have the latest technology a short-term operating lease can help you get the equipment or software and preserve your cash. Your risk of getting caught with obsolete equipment is reduced because you can upgrade or add equipment to meet your ever-changing needs.
Customized Solutions
A variety of leasing products are available, allowing you to tailor a program to fit your month-to-month or year-to-year cash flow needs.
Flexible End of Term Options
There are several options for disposing of equipment after the lease term ends including returning the equipment, renewing the lease or purchasing the equipment.
Flexibility
As your business grows and your needs change, you may have the option to add or upgrade at any point during the lease term through add-on or master leases.
Immediate Write-Off
Lease payments are treated as expenses on a company’s balance-sheet therefore, equipment does not have to be depreciated over five to seven years. (Consult with your tax professional prior to making major asset acquisition decisions)
Improved Cash Forecasting
Leasing preserves cash and by leasing equipment you know the amount and number of lease payments over the life of the leasing period, so you can accurately forecast cash requirements for your equipment.
Tax Benefits
The IRS does not consider an operating lease to be a purchase, but rather a tax-deductible overhead expense. Therefore, you can deduct the equipment lease payments from your corporate income. (Consult with your tax professional prior to making major asset acquisition decisions).